Oh good, in that case I was clear that I was talking about Melbourne only.
I really, truly, absolutely think that aspirational areas in Melbourne should be avoided for now.
It is the rental areas that we should focus on. Areas like Elwood, areas with flats, that is where I think we will see the best growth in the next couple of years.
I posted a while ago where I showed that adjacent suburbs Elwood and Brighton have totally different prospects.
Since 2003 Brighton boomed as all the new money from the share market saw the middle classes move to Nob Hill but since the "difficulties" started near the end of last year you can see the median Brighton price drop off.
Elwood, right next door, the poor cousin had a pretty flat curve all those years because people who normally buy there are investors and they were buying shares, not so much in property.
Now I am saying (and have been saying for a while now) the tables are turning. People have lost their shirts and the (up until recently) rising interest rates were slowly squeezing the pretend-rich out of Brighton. I am guessing that margin calls and such will push a few more back to suburbs from whence they came.
However, Elwood has people queueing up for rental apartments and houses. Rents have been rising as insufficient places were being bought to rent to others.
I have many friends who have bought in Elwood but they were owner-occupiers and they had little competition from investors for the past few years.
Now the investors will come back and here's the thing. When a person is bidding on a house in which they will live they can pay "X" per month.
An investor will be able to pay "X" + "Y" because he will have tenants to help carry the load and he will have tax deductions on the interest and depreciation of chattels, building etc.
So the investor will be able to pay more and as more investors come back the prices WILL rise nicely.
I need to dig up the post where I referenced the graphs for the two suburbs, it was very clear once you saw the graphs.
